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Amendments of the Administration Act

Breach of regulations

56. For section 107 of the Administration Act there shall be substituted the following section—

“107.Breach of regulations.

(1)Regulations and schemes under any of the legislation to which section 104 above applies may provide that any person who contravenes, or fails to comply with, any provision contained in regulations made under that legislation—

(a)in the case of a provision relating to contributions, shall be liable to a penalty;

(b)in any other case, shall be guilty of an offence under that legislation.

(2)Any regulations or scheme making such provision as is mentioned in subsection (1)(a) above shall—

(a)prescribe the amount or rate of penalty, or provide for how it is to be ascertained;

(b)provide for the penalty to be imposed by the Department—

(i)within 6 years after the date on which the penalty is incurred; or

(ii)where the amount of the penalty is to be ascertained by reference to the amount of any contributions payable, at any later time within 3 years after the final determination of the amount of those contributions;

(c)provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;

(d)prescribe the means by which the penalty is to be enforced; and

(e)provide for enabling the Department, in its discretion, to mitigate or to remit any such penalty, or to stay or to compound any proceedings for a penalty.

(3)A person guilty of such an offence as is mentioned in subsection (1)(b) above shall be liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale;

(b)in the case of an offence of continuing a contravention or failure after conviction, to a fine not exceeding £40 for each day on which it is so continued.

(4)Any provision contained in regulations which authorises statutory sick pay or statutory maternity pay to be set off against secondary Class 1 contributions is not a provision relating to contributions for the purposes of this section.”.

Offences and penalties relating to contributions

57. For section 108 of the Administration Act there shall be substituted the following sections—

“108.Offences relating to contributions.

(1)Any person who is knowingly concerned in the fraudulent evasion of any contributions which he or any other person is liable to pay shall be guilty of an offence.

(2)A person guilty of an offence under this section shall be liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding 7 years or to a fine or to both;

(b)on summary conviction, to a fine not exceeding the statutory maximum.

108A.Penalties relating to contributions.

(1)If a person fails to pay, at or within the time prescribed for the purpose, any contribution which he is liable to pay, he shall be liable to a penalty.

(2)If a person fails to pay, at or within the time prescribed for the purpose, any sums which he is required by regulations made by virtue of paragraph 6 or 7B of Schedule 1 to the Contributions and Benefits Act to pay, he shall be liable to a penalty under subsection (1) above without proof of his failure so to pay any particular contribution.

(3)For the purposes of subsection (1) above, regulations shall—

(a)prescribe the amount or rate of penalty, or provide for how it is to be ascertained;

(b)provide for the penalty to be imposed by the Department—

(i)within 6 years after the date on which the penalty is incurred; or

(ii)where the amount of the penalty is to be ascertained by reference to the amount of any contributions payable, at any later time within 3 years after the final determination of the amount of those contributions;

(c)provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;

(d)prescribe the means by which the penalty is to be enforced; and

(e)provide for enabling the Department, in its discretion, to mitigate or to remit any such penalty, or to stay or to compound any proceedings for a penalty.

(4)Subsection (1) above does not apply—

(a)to any failure by a person in respect of which he has been convicted of an offence under section 108(1) above; or

(b)to Class 4 contributions recoverable by the Inland Revenue.”.

Evidence of non-payment

58.—(1) For subsection (1) of section 112 of the Administration Act (evidence of non-payment) there shall be substituted the following subsections—

“(1)A certificate of an authorised officer that any amount by way of contributions, or by way of interest or penalty in respect of contributions, which a person is liable to pay to the Department for any period has not been paid—

(a)to the officer; or

(b)to the best of his knowledge and belief, to any other person to whom it might lawfully be paid,

shall until the contrary is proved be sufficient evidence in any proceedings before any court that the sum mentioned in the certificate is unpaid and due.

(1A)Subsection (2) below applies with respect to any period during which, under regulations made by virtue of paragraph 6(1) of Schedule 1 to the Contributions and Benefits Act (deduction with PAYE), contributions fall to be paid in like manner as income tax.”.

(2) In subsection (3) of that section, after the words “such a certificate”, in the first place where they occur, there shall be inserted the words “as is mentioned in subsection (1) or (2) above”.

(3) In subsection (4) of that section, the words “for a particular contribution card or”, and the words “the card in question or”, shall cease to have effect.

(4) After subsection (6) of that section there shall be added the following subsection—

“(7)In this section “authorised officer” means an officer of the Department authorised by it for the purposes of this section.”.

Recovery of contributions, etc.

59. After section 115 of the Administration Act there shall be inserted the following section—

“Recovery of contributions, etc.

115A.—(1)If—

(a)a person is served at any time with a copy of a certificate under section 112(1) above; and

(b)he neglects or refuses to pay the contributions, interest or penalty to which the certificate relates within 30 days of that time,

the Judgments Enforcement (Northern Ireland) Order 1981 (“the 1981 Order”) shall apply in relation to the amount in respect of which the certificate was issued, to the extent that it remains unpaid, as a money judgment, but subject to subsections (2) and (3) below, and such amount unpaid shall be enforceable by the Enforcement of Judgments Office on an application to it by the Department.

(2)Without prejudice to Article 141 of the 1981 Order (power to make Judgment Enforcement Rules) the Department may, with the consent of the Lord Chancellor, make such regulations with respect to the enforcement by the Enforcement of Judgments Office of amounts unpaid on certificates under section 112(1) above as it considers appropriate.

(3)Regulations made under subsection (2) above may, in particular, provide for the modification of any provision made by or under the 1981 Order in its application to certificates under section 112(1) above.

(4)In subsection (3) above, “modification” includes the making of additions, omissions or amendments.”.

Liability of directors, etc. for company’s contributions

60. After section 115A of the Administration Act there shall be inserted the following sections—

“Liability of directors, etc. for company’s contributions.

115B.—(1)This section applies to contributions which a body corporate is liable to pay, where—

(a)the body corporate has failed to pay the contributions at or within the time prescribed for the purpose; and

(b)the failure appears to the Department to be attributable to fraud or neglect on the part of one or more individuals who, at the time of the fraud or neglect, were officers of the body corporate (“culpable officers”).

(2)The Department may issue and serve on any culpable officer a notice (a “personal liability notice”)—

(a)specifying the amount of the contributions to which this section applies (“the specified amount”);

(b)requiring the officer to pay to the Department—

(i)a specified sum in respect of that amount; and

(ii)specified interest on that sum; and

(c)where that sum is given by paragraph (b) of subsection (3) below, specifying the proportion applied by the Department for the purposes of that paragraph.

(a)in a case where there is, in the opinion of the Department, no other culpable officer, the whole of the specified amount; and

(b)in any other case, such proportion of the specified amount as, in the opinion of the Department, the officer’s culpability for the failure to pay that amount bears to that of all the culpable officers taken together.

(4)In assessing an officer’s culpability for the purposes of subsection (3)(b) above, the Department may have regard both to the gravity of the officer’s fraud or neglect and to the consequences of it.

(5)The interest specified in the personal liability notice under subsection (2)(b)(ii) above shall be at the prescribed rate and shall run from the date on which the notice is issued.

(6)An officer who is served with a personal liability notice shall be liable to pay to the Department the sum and the interest specified in the notice under subsection (2)(b) above.

(7)Where, after the issue of one or more personal liability notices, the amount of contributions to which this section applies is reduced by a payment made by the body corporate—

(a)the amount that each officer who has been served with such a notice is liable to pay under this section shall be reduced accordingly;

(b)the Department shall serve on each such officer a notice to that effect; and

(c)where the reduced liability of any such officer is less than the amount that he has already paid under this section, the difference shall be repaid to him together with interest on it at the prescribed rate.

(8)Any amount paid under a personal liability notice shall be deducted from the liability of the body corporate in respect of the specified amount.

(9)In this section—

“contributions” includes any interest or penalty in respect of contributions;

“officer”, in relation to a body corporate, means—

(a)

any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act as such; and

(b)

in a case where the affairs of the body corporate are managed by its members, any member of the body corporate exercising functions of management with respect to it or purporting to do so;

“the prescribed rate” means the rate from time to time prescribed under paragraph 6 of Schedule 1 to the Contributions and Benefits Act for the purposes of the corresponding provision of that paragraph, that is to say—

(a)

in relation to subsection (5) above, sub-paragraph (2)(a);

(b)

in relation to subsection (7) above, sub-paragraph (2)(b).

Appeals in relation to personal liability notices.

115C.—(1)No appeal shall lie in relation to a notice except as provided by this personal liability section.

(2)An individual who is served with a personal liability notice may appeal to an appeal tribunal against the Department’s decision as to the issue and content of the notice on the ground that—

(a)the whole or part of the amount specified under subsection (2)(a) of section 115B above (or the amount so specified as reduced under subsection (7) of that section) does not represent contributions to which that section applies;

(b)the failure to pay that amount was not attributable to any fraud or neglect on the part of the individual in question;

(c)the individual was not an officer of the body corporate at the time of the alleged fraud or neglect; or

(d)the opinion formed by the Department under subsection (3)(a) or (b) of that section was unreasonable.

(3)The Department shall give a copy of any notice of an appeal under this section, within 28 days of the giving of the notice, to each other individual who has been served with a personal liability notice.

(4)On an appeal under this section, the burden of proof as to any matter raised by a ground of appeal shall be on the Department.

(5)Where an appeal under this section—

(a)is brought on the basis of evidence not considered by the Department, or on the ground mentioned in subsection (2)(d) above; and

(b)is not allowed on some other basis or ground,

the appeal tribunal shall either dismiss the appeal or remit the case to the Department, with any recommendations it sees fit to make, for the Department to consider whether to revise its decision as to the issue and content of the personal liability notice.

(6)In this section—

“appeal tribunal” means an appeal tribunal constituted under Chapter I of Part II of the Social Security (Northern Ireland) Order 1998;

“officer”, in relation to a body corporate, has the same meaning as in section 115B above;

“personal liability notice” has the meaning given by subsection (2) of that section;

“revise” means revise under Article 10 of the Social Security (Northern Ireland) Order 1998.”.

Class 1B contributions: supplemental

61.—(1) In section 129 of the Administration Act (amendments following alterations in Great Britain) after “143,” there shall be inserted “143A,”.

(2) In subsection (5) of section 142 of that Act (destination of contributions), after paragraph (c) there shall be inserted the following paragraph—

“(ca)in the case of Class 1B contributions, 0.9 per cent. of the amount estimated to be the aggregate of the emoluments and the amounts of income tax in respect of which those contributions were paid;”.

Payments of certain contributions out of the Consolidated Fund

62.—(1) Subsection (4) of section 143 of the Administration Act (general financial arrangements) shall have effect, and shall be deemed always to have had effect, as if—

(a)for the words “a secondary Class 1 contributor” there were substituted the words “any person”; and

(b)after the words “any secondary Class 1 contributions” there were inserted the words “, or any Class 1A contributions,”.

(2) Paragraph (2) of Article 3 of the [1977 NI 11.] Social Security (Miscellaneous Provisions) (Northern Ireland) Order 1977 (from which subsection (4) of section 143 of the Administration Act is derived) shall be deemed to have had effect with the same amendments as from the commencement of the [1991 NI 22.] Social Security (Contributions) (Northern Ireland) Order 1991.

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